Can employers elect to start the process earlier?
Yes you can, however you are required to demonstrate to the Regulator that your existing pension plan qualifies.
How can I tell if my existing scheme qualifies?
The qualification criteria are as follows;
- Will it allow automatic enrolment of eligible employees?
- Do eligible employees become automatically enrolled within ninety days of starting with the company?
- Is a default investment fund provided?
- Will it provide minimum contribution or accrual rate?
If your existing company pension plan can pass all of these tests, then it is a qualifying scheme. If it does not, then automatic enrolment must be offered to employees.
Who’s an eligible employee?
An eligible employee is defined as someone who isn't already a member of a qualifying pension scheme, over 22 years of age, under State Pension Age (SPA) and earns over a certain income per annum.
Can an employer pay more into the scheme while the employee pays less?
This is acceptable, as long as the total amount paid in meets the minimum contribution levels.
Is an employer entitled to vary the type of ‘qualifying scheme’?
This is allowed. Currently the regulations permit up to one month to conclude administration tasks, however in reality when a company chooses to move the scheme it happens instantly without breaks in the contributions.
What's the pay reference period?
This is defined as the rate or frequency that the employee is paid i.e. weekly, monthly etc. An employer will not be allowed to delay making his contributions to the employees scheme or deducting the employees contributions.
What requirements have the Pension Regulator made?
The Pension Regulator has made it compulsory for employers to meet their obligations within 9 weeks of their specific staging date and every three years subsequently. They have detailed that all records must be kept for a minimum of six years. Fixed fines of £500 for companies who break the rules, and daily penalties of £50 to £10,000 for companies who persistently break the rules.